Ecuador’s oil industry

Oil has been mined in Ecuador since 1917, but it wasn’t until Texaco struck rich with sites around Lago Agrio sixty years later that the Oriente really figured in the industry. Oil currently accounts for over forty percent of Ecuador’s export income, dominating the economy but making it vulnerable to global price fluctuations. When its value fell in the 1980s, the government signed away increasingly larger areas of the Oriente to oil production to make up for the lost revenue; today, virtually all of the Ecuadorian Amazon is available for oil extraction, even indigenous territories and protected areas. The law states that whatever the land’s designation, the oil and minerals below belong to the state, which can grant concessions for their extraction as it sees fit. The economy’s thirst for oil has been satisfied at considerable cost to the environment.

The damage begins with prospecting; in a typical search, over a thousand helicopter sites are cleared and hundreds of seismic tests destroy thousands of acres of forest. During drilling, waste oil products are collected in filthy pits laced with toxic metals that contaminate surrounding river systems; when work is finished they’re covered under a thin layer of earth and left to continue polluting. Roads are built, unlocking the forest to colonizers who deforest large areas of unsuitable land for farming which quickly becomes degraded. Oil transportation is also hazardous; breaks in Ecuador’s pipelines have resulted in around seventeen million gallons of oil pouring into the environment – a fraction of the amount dumped as waste, thought to be many billions of gallons.

The toll on local populations has been horrific. In the north, the Cofán, Siona and Secoya have been languishing since their rivers were polluted beyond use, forcing them to overhunt the forests and move to the cities to find work in unskilled and poorly paid jobs, sometimes, ironically, in dangerous oil clean-up work. Other indigenous groups have been victims of aggressive and divisive corporate tactics: leaders are bought off or villages are bribed with cash and promises to build schools and medical centres (while neighbouring and similarly affected settlements are offered nothing) to obtain permission for oil exploration. When these tactics fail, strong-arm methods – intimidation, restriction of movement, paramilitary activity – have sometimes been used. Toxic discharges have also been linked to dramatic increases in rates of cancer, miscarriages, skin complaints and birth defects. A Harvard medical team found unusually high incidences of eight types of cancer in areas affected by oil activity.

Indigenous opposition to the oil companies has become better organized. In 1993 and 2003, a lawsuit was filed against Texaco on behalf of 30,000 indigenous people, who claim their land or health has been affected by the company allegedly dumping toxic waste-water into Oriente river systems between 1964 and 1992. It’s estimated it will cost $6 billion to clean up the 18 billion gallons of toxic waste the company is alleged to have dumped – thirty times greater than the amount of crude spilled in the Exxon Valdez disaster. At the time of writing, the case was ongoing. Some indigenous groups are opting for direct action. In 2005 protestors forced Petroecuador, the state-owned oil company, to cease crude oil production for a week, and in 2006 to shut down the Trans-Ecuadorian Oil pipeline for several days. The concerted efforts of the Kichwa community of Sarayaku in Pastaza have so far successfully thwarted the attempts of an oil company to drill on its territory. Other communities of the Shuar, Achuar and Záparo have also managed to organize resistance.

It’s an uphill battle for indigenous peoples to protect their land. Ecuador is thought to be losing as much as 2000 square kilometres of forest per year, proportionally the continent’s highest rate. According to US and government figures, Ecuador’s oil reserves will be exhausted in just a few years; if the destruction continues at the current rate conservationists predict the Ecuadorian Amazon will be completely deforested within thirty years.